30 May 2022

Accounting for inflation

Multiple-choice questions: In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again

  1. How many economies are currently deemed to be hyperinflationary?

  2. Which of these is deemed to be a hyperinflationary economy?

  3. How many countries did EY put on its list to watch?

  4. Which, if any, of the following statements are true? Statement 1 - One indicator of a hyperinflationary could be that cumulative inflation over three years is approaching, or over, 100% Statement 2 - There is no plan to lower the percentage threshold for hyperinflation

  5. Where is a gain/loss on restatement recorded in accordance with IAS 29?

  6. How will increased inflation affect pension liabilities in closed defined benefit schemes?

  7. What standard will deal with lease modifications?

  8. Which, if any, of the following statements are true? Statement 1 - Inflation leading to wage increases will increase pension contributions on a defined contribution scheme Statement 2 - Revaluations of non-current assets with a finite life will decrease profit

  9. What standard will cover how to account for a loss-making contract with a customer?

  10. Which, if any, of the following statements is/are true? Statement 1 - Companies using FIFO for inventory valuation will record lower profits initially in times of inflation. Statement 2 - Lease modifications will have no impact on the financial statements

1 Unit